Introduced by Sen. Nancy Cassis R- on July 26, 2006
To allow a local government to borrow money to establish a fund to pay the unfunded liabilities created by employee contracts that promise government workers lifetime health care benefits after they stop working. A vote of the people would not be required to authorize the new debt, but it would be subject to a referendum if a certain number of voters signed petitions.. The local government would have to show that the borrowed money plus future "required annual contributions" (presumably employee contributions but this is not specified) would be sufficient to cover the unfunded health care liabilities. The new debt would be in the form of bonds backed by the full faith and credit of the local government. The presumption of the local governments that do this is that their fund managers could invest the borrowed money and earn more than the interest payments. Oakland County just announced a plan borrow $500 million to do this, and other local governments are investigating it. Official Text and Analysis.
Referred to the Senate Finance Committee on July 26, 2006
Referred to the Senate Finance Committee on December 6, 2006